People’s Bank of China (PBOC) Deputy Governor Fan Yifei provided a progress report on the PBOC’s e-CNY central bank digital currency (CBDC) pilot project. So far there have been no technical glitches, but the PBOC is working to support the connection between e-CNY and traditional payment systems and the connection between e-CNY digital wallets and bank accounts. He also mentioned that regulations need to be improved and optimized. For example, setting the boundaries between account- and value-based transactions may need to be refined (account-based transfers are large-scale transfers, while value-based transfers are smaller offline P2P payments). According to Richard Turrin, a Shanghai-based fintech consultant who recently published Cashless: China’s Digital Currency Revolution, “One big issue… would be what limit to put on value-based transfers to make them cash-like especially for rural users.”
Di Gang, Deputy Director of the PBOC Digital Currency Research Institute, reportedly said the central bank is exploring using distributed ledger technology (DLT) at the e-CNY issuance layer. Until now, the PBOC has been working with a centralized ledger technology approach because of DLT’s immaturity, performance, and scalability challenges. However, he acknowledged that perhaps these can be addressed using sidechains, multichain architectures and hardware acceleration.
On August 12 Cardano’s “Alonzo” hard fork was completed successfully. The fork enables smart contracts to be written using Plutus scripts, a purpose-built smart contract development language and execution platform using the functional programming language Haskell.
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